Correlation Between Borealis Foods and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Borealis Foods and Canlan Ice at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Borealis Foods and Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borealis Foods and Canlan Ice Sports, you can compare the effects of market volatilities on Borealis Foods and Canlan Ice and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Borealis Foods with a short position of Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borealis Foods and Canlan Ice.
Diversification Opportunities for Borealis Foods and Canlan Ice
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Borealis and Canlan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Borealis Foods and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports and Borealis Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Borealis Foods are associated (or correlated) with Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Borealis Foods i.e., Borealis Foods and Canlan Ice go up and down completely randomly.
Pair Corralation between Borealis Foods and Canlan Ice
Assuming the 90 days horizon Borealis Foods is expected to generate 22.18 times more return on investment than Canlan Ice. However, Borealis Foods is 22.18 times more volatile than Canlan Ice Sports. It trades about 0.5 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.23 per unit of risk. If you would invest 7.07 in Borealis Foods on October 24, 2024 and sell it today you would earn a total of 3.93 from holding Borealis Foods or generate 55.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Borealis Foods vs. Canlan Ice Sports
Performance |
| Timeline |
| Borealis Foods |
| Canlan Ice Sports |
Borealis Foods and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borealis Foods and Canlan Ice
The main advantage of trading using opposite Borealis Foods and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borealis Foods position performs unexpectedly, Canlan Ice can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Borealis Foods vs. Village Super Market | Borealis Foods vs. Willamette Valley Vineyards | Borealis Foods vs. United Natural Foods | Borealis Foods vs. Grocery Outlet Holding |
| Canlan Ice vs. Aquestive Therapeutics | Canlan Ice vs. Verra Mobility Corp | Canlan Ice vs. Viemed Healthcare | Canlan Ice vs. HUTCHMED DRC |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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